CONDENSED INTERIM - PDF document

1 RIWI CORP. CONDENSED INTERIM
RIWI CORP. CONDENSED INTERIM FIN A N C IAL STATEMENT S For the Three Months ended March 31, 20 20 and 201 9 (Expressed in United States Dollars) ( Unaudited ) - 2 - RIWI CORP. NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51 - 102, part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of RIWI Corp. ( the “ Company ”) have been prepared by management and approved by the Audit Committee and Board of Directors of the Company. They include appropriate ac counting principles, judgment , and estimates in accordance with International Financial Reporting Standards for interim financial statements. The Company’s independent auditors have not performed a review of these condensed interim financial statements in accordance with the standards established by the C hartered Professional Accountants of Canada for a review of condensed interim financial statements by an entity’s auditors. ( The accompanying notes are an integral part of these annual financial statements ) - 3 - RIWI C ORP. Condensed Interim Statement of Financial Position As at March 3 1 , 2020 and December 31, 2019 ( Unaudited and Expressed in U.S. D ollars) Approved and authorized for issuance on behalf of the Board on April 28 , 20 20 . “Nei

2 l Seeman” (signed) “Annette C
l Seeman” (signed) “Annette Cusworth” (signed) Neil Seeman Chairman of the Board and Chief Executive Officer Annette Cusworth Chair of the Audit Committee ( The accompanying notes are an integral part of these annual financial statements ) - 4 - RIWI CORP. Condensed Interim Statements of Income and Comprehensive Income For the Three Months ended March 31, 20 20 and 201 9 (Unaudited and Expressed in U.S. Dollars) ( The accompanying notes are an integral part of these annual financial statements ) - 5 - RIWI CORP. Condensed Interim Statements of Changes in Equit y For the Three Months ended March 31, 2020 and 2019 (Unaudited and Expressed in U.S. Dollars) ( The accompanying notes are an integral part of these annual financial statements) - 6 - RIWI CORP. Condensed Interim Statements of Cash Flows For the Three Months ended March 3 1 , 20 20 and 201 9 (Unaudited and Expressed in U.S. Dollars) RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 7 - 1. NATURE OF OPERATIONS RIWI is a public company and its shares are all common shares listed on the Canadian Securities Exchange (CSE: RIW). The Company was originally incorporated under the laws of Canada pursuant to the Canada Business Corporations Act on August 17, 2009. The Company’s head office is located at 180 Bloor Street West, Suite 1000, Toronto, Ontario, M5S 2V6 and RIWI’s registered office is locate

3 d at Suite 1700, Park Place, 666 Burrar
d at Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC, V6C 2X8. The Company also maintains an office in Vancou ver, BC. RIWI is a global trend - tracking and prediction technology firm. Our patented, cloud - based software solutions provide a global digital intelligence platform to clients seeking real - time citizen sentiment data anywhere in the world in order to a ssist in decision making primarily related to earnings, assessing consumer behavior, and monitoring and reducing violent conflict. These unaudited condensed interim financial statements of the Company for the three months ended March 31, 20 20 ( the “Financ ial Statements”) have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilitie s in the normal course of business for the foreseeable future. For the three months ended March 31, 20 20 , the Company had net income of $ 4 98 , 437 (201 9 – $ 236,900 ) and net cash provided by operating activities of $1 28,002 (201 9 – $ 168,573 ). As at March 31, 20 20 , the Company had an accumulated deficit of $2, 1 96 , 999 (December 31, 201 9 – $ 2,695,43 6 ). The continuing operations of the Company are dependent upon its ability to continue to generate positive cash flows from operations and/or raise adequate financing if and when necessary. These F inancial S tatements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if the Company were unable to re

4 alize its assets and settle its liabili
alize its assets and settle its liabilities as a going concern in the normal c ourse of operations. Such adjustments could be material . 2. BASIS OF PRESENTATION These F inancial S tatements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to interim financial information, as outlined in International Accounting Standard (“IAS”) 34, Interim Financial Reporting and using the accounting policies consistent with those in the audited financial statements as at and for the ye ar ended December 31, 201 9 . These F inancial S tatements do not include all disclosures normally provided in annual financial statements and should be read in conjunction with the annual financial statements as at and for the year ended December 31, 201 9 . Interim results are not necessarily indicative of the results expected for the fiscal year. These F inancial S tatements were authorized for issuance by the Company’s Board of Directors on April 28 , 20 20 . These F inancial S tatements have been prepared on the historical cost basis except for certain financial instruments, which are measured at amortized cost , consistent with the Company’s significant accounting policies. RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 8 - 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Use of estimates and judgments The preparation of the se F inancial S tatements in conformity with IF

5 RS requires management to make judgment
RS requires management to make judgments, estimates and assumptions that affect the application of accounting policies regarding certain types of assets, liabilities, revenues an d expenses in the preparation of the F inancial S tatements . Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts are as follows: (i) Going c oncern Prior to 2018, the Company incurred losses and the Company’s ability to execute its strategy by funding future working capital requirements requires judgment. Estimates and assumptions are continually evaluated and are based on historical experien ce and other factors, such as expectations of future events that are believed to be reasonable under the circumstances . (ii) Ass et c a rr yi n g v a l u es a n d i mp ai r m e n t c h a r g es In the d e te rm ination of ca rr ying valu e s a n d im p ai rm e n t cha r g e s, m a n a g e m e n t looks at the hig h er of r ecove r a b le a m o u nt or fair value less costs t o sell in the case of asse t s a n d at o b j ective evid e nce, signif i cant or p r olo n g e d d e cline of fair value of asse t s ind i cating im p ai rm e n t. T h e se d

6 e te rm inations a n d th e ir indiv
e te rm inations a n d th e ir individual assu m ptions r e q ui r e t h a t m a n a g e m e n t m ake a d e cis i on b a sed on t he b e st available inf orm ation a t e ach r e p o r t i ng p er iod . (iii) I n c om e t a x es a n d r e co v e r a b ili t y o f pot e n t ial d e f e rr ed income t ax a s s ets In assessing the p r o b a b il i ty of r e alizing inco m e tax asse t s r ecog n i zed, m a n a g e m e n t m akes esti m at e s r elated to expect a tions of fu t u r e tax a ble inco m e, a p plicable tax pla n ning o p p o r tu n i ties, expect e d timing of r eve r sals of existing te m p or a r y diff er e n ces a n d the likel i h o od th a t tax p o sitions tak e n wi l l be sust a ined u p on exa m ination by a p plicable tax a u th or ities. In m aking its a ssessme n ts, m a n a g e m e n t gives a d di t ion a l w e ight to p o sitive a n d n e g a tive evid e nce th a t can be o bjectively ve r i f ied. E s t im a tes of f ut ur e tax a ble inco m e a r e b a sed on fo r ecasted cash flows f r om o p e r ations a n d the a p plication of existing tax l aw s . W h e r e a p plicable tax laws a n d r e g ulations a r e either u n clear or subject to o n g o ing v a r ying inte r p r et a tions, it is r e a sona b ly p o ssible th a t chan g es in th e se esti m at e s can occur th a t m at er ially af f ect t he a m o u nts of inco m e

7 t a x asset s r ecog n ized. A
t a x asset s r ecog n ized. A lso, fu t u r e chan g es in tax la w s could limit the Co m p a ny f r om r e a liz i ng the tax b e n e fi t s f r om the d e fe rr ed income tax asse t s. T he Co m p a ny r e a ssess e s u nr ecog n ized inco m e t ax a sse t s on an annual basis. (iv) M e a s u r e m e n t o f s h a r e - b a s ed c omp e n s at i o n M a n a g e m e n t d e te rm ines costs for sha re - b a sed p a yme n ts using m a r ke t - b a sed valu a tion tec h niq u es. T he fair value of the m a r ke t - b a sed a n d p e r fo rm a n c e - b a sed n on - vest e d sha r e awa r ds a r e d e te rm ined at the d a te of g r a n t using g e n er ally acce p ted valu a tion te c h n iqu e s. A ssu m ptions a r e m a d e a n d jud gm e n t used in a p plying valu a tion tec h niq u es. T h e se as su m ptions a nd judg m e n ts in c lude estim a ting t he f u tu r e v o latili t y of t h e stock p ri ce, expect e d dividend yield, fu t u r e e m ploy e e tu r n o ver r at e s a n d fu t u r e e m ploy e e stock o p tion exe r cise b e h avio r s a n d co r p or ate p er fo rm a n ce . RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 9 - 4. ACCOUNTS RECEIVABLE Accounts receivable consists of trade receivables from clients. Please see N ote 1 4 (a) for aged trade receivable

8 information . 5. NON - CURRENT AS
information . 5. NON - CURRENT ASSETS (a) Property and Equipment Property and equipment consist of computers and leasehold improvements. The Company depreciates its computers using the straight - line method over 24 months. The Company is depreciating the leasehold improvements over the remaining term of its office lease , which terminates on May 31, 2023 . RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 10 - 5 . NON - CURRENT ASSETS (continued) (b) Intangible Assets Intangible assets consist of a patent , domain names , trademarks and w ebsite . The Company owns US Patent #8,069,078. This patent , which expires in July 2030, relates to a method of obtaining a representative online polling sample or ad test globally . The Company has classified the patent as a finite life intangible asset and is amortizing it using the straight - line method over 20 years . The Company purchase d Internet domain names in 2017 which have strategic value for current intellectual property development . The Company has classified the domain names as a finite life intangible asset and is amortizing them using the straight - line method over 10 years. I n 2018, the Company applied for trademarks of the word mark “RIWI” in Canada, United States of America and the European Union. During 2019 , RIWI obtained the trademarks in the USA and the EU, and is currently waiting for the finalization of the Canadian t ra

9 demark. The Company has classified the
demark. The Company has classified the trademarks as finite life intangible assets. Upon obtaining the trademark s , the Company is amortiz ing them using the straight - line method over 10 years . In 20 19 , the Company updated its website to ensure technical privacy compliance. The Company is amortizing this capital expenditure using the straight - line method over 3 years . RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 11 - 6. RIGHT - OF - USE ASSETS The following table presents the Company’s right - of - use assets, which is comprised of its head office lease . Amortization in the amount of $ 10,724 has been included under general and administrative expenses for the three months ended March 31, 2020 (2019 – $9,411). 7. SHARE C APITAL Au t hor i ze d: u nli m ite d nu m be r o f co mm o n shares without par value . Issued: As at March 31, 2020 , the Company had 17 , 934 , 428 common shares issued and outstanding ( March 31, 2019 – 17, 4 95 , 742 ) having a carrying value of $ 4, 881 , 049 as at March 3 1 , 2020 ( March 31, 2019 – $4, 5 70 , 54 1 ). N et income and comprehensive income were $ 4 98 , 43 7 for the three months ended March 3 1 , 2020 ( three months ended March 31, 2019 – $ 236 , 900 ) , and the basic and diluted net income per share was $0. 03 ( 2019 – $0.0 1 ) . RIWI CORP. Notes to the Condensed Interim F

10 inancial Statements Three Months ended
inancial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 12 - 7. SHARE CAPITAL (continued) Contributed surplus reconciliation is noted below: In September 2019, 656,571 share purchase warrants expired without being exercised. In November 2019, the final 5,500 share purchase warrants were exercised in exchange for 5,500 common shares, leaving the Company with no outstanding share purchase warran ts as at December 31, 2019. 8. SHARE - BASED PAYMENTS The Company has a s t oc k o p ti o n p l a n unde r wh ic h i t i s au t hor i ze d t o gran t op ti on s t o d i rec t ors , e m p l o y ee s , and consu lta nt s enab li n g t he m t o acqu i r e in aggregate u p t o 20 % o f t h e i ssue d an d ou t s t and i n g co mm o n sha r e s o f t h e C o m p an y . Under th e plan , th e exercis e pric e o f eac h optio n equal s th e ma r ke t price , mi ni m u m price , o r a discounte d pric e o f the C o m pany' s share s a s ca lc ula t e d o n t h e da t e o f gran t . T h e o p ti on s ca n b e gran te d fo r a m a xi m u m te r m o f 10 y e ar s a n d ar e subjec t t o v e st i n g prov i s i on s a s de te r mi n e d b y t h e B oar d o f D i rec t or s o f th e C o m pan y. The following table summarizes the continuity of the Company’s stock options: During the three months ended March 31, 2020 , 70 ,000 stock options were exe

11 rcised in exchange for 70 ,000 common
rcised in exchange for 70 ,000 common shares and 175 , 000 stock options were cashlessly exercised in exchange for 112 , 728 common shares. For the three months ended March 31, 2020 , the Company recorded share - based payment expense, with a corresponding credit to reserves of $ nil ( March 31, 201 9 – $ 2,650 ). RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 13 - 8 . SHARE - BASED PAYMENTS (continued) Additional information regarding stock options outstanding as at March 3 1 , 2020 is as follows: 9. LEASE OBLIGATIONS The Company’s head office currently shares space with a third - party firm, and it is responsible for 50% of the monthly lease payments. The Company’s total lease payments are currently CAD $ 5,925 (US $4,176) per month, increasing to CAD $ 5,995 (US $4,226) per month on June 1, 2020. The office lease expires on May 31, 2023. F or the three months ended March 31, 2020 , t he lease accretion was $10,643 and the payments totaled $1 3 , 0 65 . For the year ended December 31, 2019, t he lease accretion was $41,013 and the payments totaled $41,568. 10. REVENUE (a) Revenue streams The Company generates revenue primarily from the provision of analytical solutions to its clients in the form of compilation, analysis and communication of real time data. All the Company’s revenue is generated from contracts from customers in relation to the Company’s principal activities. RIWI’

12 s revenue disaggregated by geographical
s revenue disaggregated by geographical locations is analyzed in Note 1 5 . (b) Performance obligations and revenue recognition RIWI records revenue from contracts with customers in accordance with the five steps in IFRS 15, Revenue from Contracts with Customers as follows: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, which is the total consideration provided by the customer; (iv) allocate the transaction price among the performance obligations in the contract based on their relative fair values; and (v) r ecognize revenue when the relevant criteria are met for each performance obligation. Revenue is measured based on the consideration specified in the contract. The Company recognizes revenue over time as it transfer s control of its services based on the d elivery milestones outlined in the contract. Progress is determined based on completion of standard milestones ( i .e. output method). RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 14 - 10 . REVENUE (continued) (c) Estimate and judgments RIWI use s estimates in determining the standalone selling price of performance obligations and allocation of the transaction price between performance obligations. In determining the standalone selling price, we allocate revenue between performance obligations bas ed on the expected enforceable amounts to which RIWI is entitled .

13 (d) Unbilled revenue and deferred reve
(d) Unbilled revenue and deferred revenue Unbilled revenue relates to RIWI’s right to consideration for work completed but not yet billed at the reporting date. RIWI transfers unbilled revenue to accounts receivable on invoicing. Below is a summary of unbilled revenue from contracts with custome rs and the significant changes in those balances during the three months ended March 31, 20 20 and 2019 . Deferred revenue primarily relates to advance consideration received from customers for services yet to be performed. Deferred revenue will be recognized as revenue over time as RIWI achieves the delivery milestones. Below is a summary of deferred revenue from contracts with customers and the significant changes in those balances during the three months ended March 31, 2020 and 2019 . RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 15 - 11. OPERATING EXPENSES Effective January 1, 2020, the Company modified its classif ication of operating expenses by nature , including allocating personnel costs between the general and administrative, sales and marketing, and technology expense categories. Previously, all of the Company’s employee salaries and benefit costs were allocated to the general and administrative expense category. The comparative historical information has been updated to reflect the allocation. (a) General and Administrative Expenses (b) Sales and Marketing Expenses

14 (c) Technology Expenses R
(c) Technology Expenses RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 16 - 12. TAX NOTE As stated in Note 3(a) above, t he Co m p a ny r e a ssess e s u nr ecog n ized inco m e t ax a sse t s on an annual basis. The following table reconciles the expected income tax recovery at Canadian statutory income tax rates to the amounts recognized in the statement of income and comprehensive income for the years ended December 31, 2019 and 2018: The Company has recorded deferred tax assets/(liabilities) as follows, the benefits of which had not been recognized until the year ended December 31, 2019: 13. RELATED PARTY TRANSACTIONS Related party transactions are comprised solely of compensation for the Company’s key management personnel . (a) For the three months ended March 3 1 , 20 20 , the Company recognized share - based payment expense of $ nil ( three months ended March 3 1, 201 9 – $ 2,650 ) for stock options granted to one officer. 14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT As at March 31, 2020 , the Company’s financial instruments are comprised of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities. The amounts reflected in the statement of financial position are carrying amounts and approximate their fa ir values due to their short - term nature. These financial instruments are classified as at March 31, 2020 as follows: •

15 Cash and cash equivalents – amorti
Cash and cash equivalents – amortized cost • Accounts receivable – amortized cost • Accounts payable and accrued liabilities – other financial liabilities RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 17 - 14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued) The evaluation of the financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3 based on the degree to which the fair value is observable. • Level 1 of the fair value hierarchy includes unadjusted quoted prices in active markets for iden tical assets or liabilities ; • Level 2 of the hierarchy includes inputs that are observable for the asset or liability, either directly or indirectly ; and • Level 3 includes inputs for the asset or liability that are not based on observable market data . T he Company has no financial instruments measured at F air Value Through the Statement of Profit or Loss. The following is a discussion of the Company’s risk exposures: (a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company’s trade accounts receivable are due from customers and are subject to normal credit risk. The following table provides information regarding the aged trade receivables : At each period end, the Company reviews the col

16 lectability of outstanding receivables.
lectability of outstanding receivables. The specific accounts are only written off once all the collection avenues have been explored or when legal bankruptcy has occurred. The Company has a $nil balance for allowance for doubtful accounts as at March 31, 2020 and December 31, 2019 . The following table identifies customers comprising 10% or more of the Company’s revenue for the three month s ended March 3 1 , 2020 and March 31, 2019 : (b) Liquidity risk Li qu i d ity risk is t h e risk t h at t h e C o m p a n y will no t b e a b le to m eet its fi nan cial ob li g atio n s as t h ey are du e . The Company has in place a planning and budgeting process which helps determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. T h e C o m p a n y’s fi n a n cial liabili t ies c on sist of acc o u n ts p aya b le and accrued lia b ilities a n d co n sist o f i n v o ices pa y able to tr ad e s u ppliers f o r online advertising technology services, server hosting, gen e ral and a d m inistrati v e , and other expenses a n d a re pa i d wit h in one y ear. T h e C o m p a n y ex p ects to fu n d t h ese lia b i l ities t h ro u g h t h e u se of e x isti n g cash reso u rces and fun d s raised t h r o ug h e quity fin a nci n gs, if required. RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaud

17 ited and Expressed in U.S. D ollars)
ited and Expressed in U.S. D ollars) - 18 - 14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued) (c) Market risk Market risk is the risk that changes in m a rket prices, such as i n terest rates a n d foreign e x c h an g e rates will affect t h e C o m p a n y’s n et ear n in g s or t h e v al u e of fi n a n cial i n str u m e n ts. T h e o b j ec t i v e o f t h e Co m p any is to manage a n d m i tigate m arket risk ex po s u r es within acc e ptab l e li m its, while maxi m izing returns. (i) Interest rate risk : The Company has cash balance s and no interest - bearing debt, and is not exposed to any significant interest rate risk. (ii) Foreign currency risk : The Company’s activities are conducted in foreign jurisdictions ; the majority of the Company’s operating expenses are in Canadian dollars ; and a portion of the Company’s cash is denominated in Canadian dollars. The Company has not entered into foreign exchange rate contracts to mitigate this risk. As at March 3 1 , 2020 , financial instruments were converted at a rate of US$1.00 to CAD$1. 4187 . Balances denominated in foreign currencies as at March 3 1 , 2020 were as follows: The esti mated impact on net income for the three months ended March 3 1 , 2020 with a +/ - 10% change in Canadian D ollar exchange rate is approximately $ 7,000 ( 2019 – $ 2 ,000 ) . (d) Capital management Th e C o m pan y ’ s cap it al i s define d t o b e shar e ho l der s ’ equ ity . Th

18 e C o m pan y ’ s objec ti v e i n
e C o m pan y ’ s objec ti v e i n m anag i n g cap it a l i s t o ensur e i t ha s a dequat e workin g c a pita l t o me et da y t o da y need s an d acces s t o sou r ce s o f capita l sufficien t to financ e it s op e ration s an d t o mak e p l anne d capita l expenditure s o r capita l acqu i sition s a s o p p o rtunitie s presen t th e m s e lves . Th e C o m pan y m a nage s it s ca p i t a l s t ruc t ur e an d m ake s change s t o i t i n li gh t o f change s i n eco n o m ic conditions , anticipate d o r p l anne d capita l expenditures , opportunitie s fo r acqu i sition s an d th e ris k characteris t ics o f t h e u n der ly i n g in vest m en t s. Th e C o m pa n y i s no t subjec t t o an y externall y impose d capit a l requir e m e n t s. 15. SEGMENT REPORTING The Company is required to disclose certain information regarding operating segments, products, services and geographic areas. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer . The Company operate s as one reportable segment for 2020. The approxi mate sales revenue based on geographic location of customers for the three months ended March 3 1 , 2020 and 2019 is as follows :

19 RIWI CORP. Notes to the Condensed
RIWI CORP. Notes to the Condensed Interim Financial Statements Three Months ended March 31, 20 20 and 201 9 ( Unaudited and Expressed in U.S. D ollars) - 19 - 16. COVID - 19 OUTBREAK On January 30, 2020, the World Health Organization (“WHO”) declared the ongoing COVID - 19 outbreak a global health emergency and on March 11, 2020, the WHO expanded its classification of the outbreak to a pandemic. Federal, state, provincial and municipal governments in Canada have begun enacting measures to combat the spread of COVID - 19. The COVID - 19 o utbreak continues to rapidly evolve and is causing business disruptions across the entire global economy and society. The Company has determined that these events are non - adjusting events. Accordingly, the financial position and results of operations as of and for the three months ended March 31 , 20 20 have not been adjusted to reflect their impact. T he Company has taken measures to mitigate risks of COVID - 19, including : closing its offices and having all st aff work from home ; enacting strict travel restrictions in accordance with provincial and federal rules ; and recommending all staff to practice safe physical distancing in accordance with the guidelines of the health authorities . The duration and impact of the COVID - 19 pandemic, as well as the effectiveness of government responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the f inancial position and results of the Company for